In the closing keynote presentation June 28th at The Yankee Group's 2006 North American Wireless Leadership Summit in New York, Denny Strigl, president and chief executive officer of Verizon Wireless, announced that Verizon Wireless will begin to pro-rate the early termination fee (ETF) for customers nationwide in the fall. Verizon Wireless is the first major U.S. carrier to commit to a national policy to pro-rate the ETF. The company will include new terms in customer contracts that will progressively reduce the amount a customer has to pay if they terminate their contract with Verizon Wireless before their committed term expires. The pro-rate will apply to contracts signed or renewed after the policy takes effect, and the amount owed will vary depending on the time remaining in the contract.
Strigl said the change is being made to adapt policies to customers' needs. "We believe dissatisfaction with flat early termination fees is tarnishing the entire industry," he said. Verizon Wireless has the most loyal customer base, as well as the highest ratio of local number portability (LNP) port-ins. "We also know that the few customers who leave us often return. We will work even harder to continue to deliver the best network and the best service, so customers won't want to leave us in the first place. That's what competition is all about."
To that end, Strigl outlined benefits Verizon Wireless will add to its Worry Free Guarantee for customers who pay their bills online via the company's Web site. The additional guarantees include:
* Customers will receive notices via e-mail if there is a price plan that better matches their usage needs.
* To enable customers to take advantage of new technology more quickly, any customer with a $49.99 or higher price plan may upgrade their primary line handset after 12 months at the then current promotional price and conditions. The company will continue to offer a free phone upgrade every two years as it does now for all customers.
* If a customer's phone fails after the manufacturer's warranty, the customer will not pay more than $50 for a replacement phone.
* If a customer chooses, Verizon Wireless will store their phone contact list on its network at no cost so contacts can easily be restored when a phone is lost or stolen, or when a customer purchases a new handset.
Commenting on the Summit's theme of "wireless disruption," Strigl discussed how the wireless industry has the ability to transform itself in the years ahead by continuing to add value for customers through technology and responsiveness.
Strigl noted transforming trends going forward will look different than past transformations; they will happen over shorter periods of time and have a more customized appeal. Also, there won't be any one single earth-shattering application that will transform value for everyone, so the industry needs a constant stream of applications and content. Finally, transformations in the wireless business have been and will continue to be all about the distribution of the applications and services -- the network.
"It's the network that brings applications to life," he said. "The network is the enabler and the differentiator."